Comping

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This is not an academic exercise. This is a battle-hardened system for determining a property's real-world value and engineering a brutally effective offer. Forget emotional haggling; we operate on cold, hard data.

Our core philosophy is a strategic shift in perspective: You and the seller are not adversaries. You are collaborators against the objective, uncaring data of the market. Your mission is to work together to find a price the data supports. This framework disarms seller resistance and allows you to close deals on your terms, creating a smooth, predictable closing that they will appreciate.

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Section 1: The Core Principle – Master the CCV

Before any analysis begins, you must lock down the single most critical metric in this entire operation: the Current Condition Value (CCV).

Definition: The CCV is the price a property would realistically sell for on the open market (e.g., the MLS) right now, in its exact current state. No fantasy repairs, no future potential—just its raw, present-day value.

Why CCV is King: Forget After Repair Value (ARV). ARV is a vanity metric for flippers planning full-scale renovations. We are not turning these houses into magazine covers; we are moving assets efficiently. The CCV is grounded in the brutal reality of the property today, which is the only reality that matters for a quick acquisition and sale. Your entire negotiation hinges on the accuracy and defensibility of this number.

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Section 2: The Battle Plan for CCV Determination

Execute this plan methodically. Every step is critical. Skipping steps leads to flawed intelligence and failed deals.

The Battle Plan for CCV Determination

The Battle Plan for CCV Determination

Step 1: Target Acquisition (Intel Gathering)

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Step 2: Asset Triage (Know Your Subject)

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Step 3: The Comp Hunt (Analyzing the Battlefield)

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Step 4: The Commander's Decision (Final CCV Determination)

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Section 3: The Strike Price – Engineering Your MAO

With a defensible CCV, calculating your offer is a simple, non-negotiable formula. This is your Maximum Allowable Offer (MAO)—the absolute ceiling you can pay.

The formula is:

(CCV×0.90)−Minimum Profit=MAO

Deconstructing the Formula:

CCV×0.90 (The 10% Buffer): This is your operational buffer, not profit. It covers realtor commissions, closing costs, seller concessions, and a contingency for unforeseen expenses. It aggressively prices the property for a fast sale.

Minimum Profit (e.g., $30,000+): This is your non-negotiable profit target. For most deals under $300k, $30,000 is the hard minimum. Without this, the deal is not worth your time.

Example:

You determine a property's CCV is $250,000.

$250,000×0.90=$225,000

$225,000−$30,000=$195,000

Your MAO is $195,000. This is the highest price you can logically offer. It becomes the data-driven foundation of your negotiation.

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Section 4: The Art of Engagement – The "Front-Load the Pain" Strategy

How you present the offer is as important as the offer itself. Your strategy must be to have the tough, data-driven conversation once, upfront.

The Principle:

It is infinitely better to have one difficult negotiation to agree on a realistic price than to agree to an inflated price and try to claw it back later through inspections or other contingencies. Renegotiating shatters trust and kills deals.

High Initial Offer = Upset Seller Later:

Agreeing to a price you can't stand behind just to make the seller happy is a recipe for disaster.

You will inevitably fail to perform or have to ask for a price reduction, destroying the relationship.

Realistic Initial Offer = Happy Seller Later:

Securing a deal at or below your MAO provides the operational margin to handle issues, close quickly, and give the seller the seamless, hassle-free experience they truly want.

Use your comps to build the narrative, showing them what real cash buyers are paying in their neighborhood to ground the conversation in fact, not emotion.

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Section 5: Special Operations – Handling Irregular Targets

Not every property is a clean shot. Rural homes, unique properties, or areas with thin data require tactical adjustments.

When Data is Scarce: Be conservative. Your offer must reflect the increased risk. When in doubt, your offer goes lower, not higher. In many rural markets, you may be the seller's only viable cash alternative to a lengthy and uncertain realtor listing. Understand this leverage.

The Price-Per-Square-Foot Trap: Avoid this as a primary valuation tool. It's a deeply unreliable metric, as smaller homes almost always have a higher price-per-square-foot. Use it only as a loose sanity check between very similar properties.

Use Your Eyes: Data isn't everything. Use Google Street View. Does the comp's street look and feel the same as your subject property's? A property one block over can be in a completely different value tier. This qualitative check will save you from catastrophic valuation errors.

If you’re looking for novations, Prexium is where you’ll find the right leads to close more deals. Start today 👉

The Cowboy Marketer⁠

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